IDEAS home Printed from https://ideas.repec.org/a/bla/worlde/v38y2015i1p110-135.html
   My bibliography  Save this article

Inequality, Saving and Global Imbalances: A New Theory with Evidence from OECD and Asian Countries

Author

Listed:
  • Xinhua Gu
  • Baomin Dong
  • Bihong Huang

Abstract

type="main" xml:id="twec12188-abs-0001"> Global imbalances are attributable to savings deficiency in some economies and savings glut in others. The recent global crisis has triggered widespread social conflict over income inequality. The inequality-saving link has again become a pressing issue needing serious attention. We present a new theory to explain why the link between inequality and saving is negative in OECD countries but positive in emerging Asia. We also offer an econometric analysis of differences in inequality-saving links between those economies. We find that aggressive financial services lead to a negative link by creating income illusion for overconsumption, but imperfect financial markets contribute to a positive link by interacting with industrial policies as part of growth strategies while ignoring liquidity constraints on consumption.

Suggested Citation

  • Xinhua Gu & Baomin Dong & Bihong Huang, 2015. "Inequality, Saving and Global Imbalances: A New Theory with Evidence from OECD and Asian Countries," The World Economy, Wiley Blackwell, vol. 38(1), pages 110-135, January.
    • Handle: RePEc:bla:worlde:v:38:y:2015:i:1:p:110-135
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/twec.2015.38.issue-1
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gu, Xinhua & Li, Guoqiang & Chang, Xiao & Guo, Haizhen, 2017. "Casino tourism, economic inequality, and housing bubbles," Tourism Management, Elsevier, vol. 62(C), pages 253-263.
    2. Chan, Kenneth S. & Dang, Vinh Q.T. & Li, Tingting & So, Jacky Y.C., 2016. "Under-consumption, trade surplus, and income inequality in China," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 241-256.
    3. Schulz, Jan & Mayerhoffer, Daniel M., 2021. "A network approach to consumption," BERG Working Paper Series 173, Bamberg University, Bamberg Economic Research Group.
    4. Jan Behringer & Till van Treeck, 2013. "Income distribution and current account: A sectoral perspective," IMK Working Paper 125-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    5. Behringer, Jan & van Treeck, Till, 2018. "Income distribution and the current account," Journal of International Economics, Elsevier, vol. 114(C), pages 238-254.
    6. Xinhua Gu & ChunKwok Lei & Li Sheng & Qingbin Zhao, 2021. "Global current account imbalances and the link between income and consumption inequality," Review of International Economics, Wiley Blackwell, vol. 29(3), pages 557-572, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:38:y:2015:i:1:p:110-135. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.